A surging global demand for uranium as countries turn increasingly to nuclear power is causing a modern-day gold rush in Australia and increasing pressure on the opposition Labor Party to ditch its policy of banning new mines. The dusty red Outback contains the world's largest known reserves of uranium and this month's deal to supply China has prompted a flurry of stock-market activity. Shares in mining and exploration companies are sky rocketing, helping push bourses to historic highs. The deal to provide nuclear fuel to China, which plans to build dozens of nuclear reactors in the next 20 years, has intensified calls for Labor to drop its 'no new mines' policy. Since 1984, the party has restricted uranium mining to just three operations - two in South Australia and one in the Northern Territory. Experts say it has put a stranglehold on the industry and allowed Canada to outpace Australia in global supply, despite having substantially smaller reserves. Ric Klusman, a dealer at Aequs Securities, said investors were pinning their hopes on the ban being lifted. 'Uranium is the new gold,' he said, noting that shares in mining giant BHP Billiton, which controls the huge Olympic Dam mine in South Australia, had more than doubled from A$14.83 ($86) to A$30.95 over the past two years. Exploration company Toro Energy, which listed in March at A25 cents, has already surged to A94 cents. Shares in Energy Resources of Australia, which runs the Ranger mine in the Northern Territory, have jumped from A$5.90 to A$15 over two years, he added. 'Investors sense the huge demand,' Mr Klusman said, noting that India was also eyeing Australian uranium. The country is currently shut out because of Canberra's policy of not supplying nations that have not signed the Nuclear Non-Proliferation Treaty. 'Countries across Asia are going to have a massive demand for uranium and my gut feeling is that uranium stocks will keep on going up and up and up,' he added. Australia holds between 30 and 40 per cent of the world's known uranium reserves, and accounts for 22 per cent of the world's supply. In the five years to 2005, it exported 46,600 tonnes of uranium oxide concentrate to 11 countries, according to industry body the Uranium Information Centre. The European Union, Japan, South Korea and the United States are Australia's biggest customers. The centre's general manager Ian Hore-Lacy said that China's demand for uranium was expected to rise from 1,500 tonnes to 8,000 tonnes a year by 2020, which alone could absorb all of Australia's present exports. But the prospects of large-scale expansion are being hindered by Labor's commitment to block any new uranium mines. Clause 66 of the party's national platform states that 'production of uranium and its use in the nuclear fuel cycle present unique and unprecedented hazards and risks'. Although the party is not in federal government, it controls all the state and territory governments across Australia, which in turn are responsible for mining and exploration. The Minerals Council of Australia, an industry lobby group, is demanding the policy be lifted. Mitchell H. Hooke, the council's chief executive, said it was 'inherently flawed' and said that 'other countries, notably Canada and Kazakhstan, will fill the vacuum created by Australia'. The issue is likely to dominate Labor's National Party Conference in April next year as pressure is growing in the party, both at state and federal level, for a rethink. But leaders insist issues such as nuclear proliferation and environmental concerns must first be addressed. 'Labor's policy is not an anti-uranium policy,' said Anthony Albanese, the shadow minister for environment and heritage. 'Labor's platform achieves economic responsibility in not repudiating existing contracts whilst opposing Australia being further involved in the nuclear fuel cycle.' Experts are also warning of the environmental costs of extracting more uranium and the dangers of nuclear proliferation. The deal signed in Canberra by Australian Prime Minister John Howard and Premier Wen Jiabao has strict conditions attached. The uranium will be provided only to electric utilities and nuclear facilities will be open to international inspection.